Ep. 370: Eric Beinhocker on Market Humanism, the End of Neoliberalism, and Human Flourishing

**Bilal Hafeez** (0:03)
Welcome to the Macro Hive Conversations Podcast. I'm Bilal Hafeez, Head of Strategy at Macro Hive. Before we dive in, a quick update. Following Macro Hive's acquisition by the BGC Group, BGC has launched a new regulated business called Macro Hive Markets. For the first time, onboarded clients can also access execution services via Macro Hive Markets. This new workflow will allow macro institutional investors to benefit from strategy and insights alongside access to global liquidity. Please contact Andrew Simon or Gail Motibrian on Bloomberg or click the link in the description below for more details on Macro Hive Markets and its service offering.
Now on to this episode's guest, Eric Beinhocker. Eric is a professor at the University of Oxford's Blavatnik School of Government and the founder and executive director of the Institute for New Economic Thinking at the Oxford Martin School, INET Oxford. A research center dedicated to applying innovative economics to major societal challenges. He is also chairman of the Science Board at the Santa Fe Institute. Prior to his academic career, Eric spent three decades as a tech entrepreneur, venture capitalist and consultant to Fortune 500 companies. He is the author of The Origin of Wealth, The Radical Remaking of Economics and What It Means for Business and Society. Now on to our conversation. Greetings and welcome, Eric. It's fantastic to have you on the podcast show.

**Eric Beinhocker** (1:22)
Thanks, Bilal. Very nice to be here.

**Bilal Hafeez** (1:24)
Now, before we get into the meat of our conversation, I do like to ask my guest something about their origin story. So it would be great to hear in your own words what you studied at university. Was it inevitable you would end up in the private sector and then also academia as well?

**Eric Beinhocker** (1:37)
Yeah, I kind of, I like to say I did my career backwards. Yeah, there's many people who start off in academia and then eventually end up in investing or business. But I went the other way around. I studied economics and engineering at university, but ended up going into the tech world, had a startup software company right out of college, sold it, went into venture capital, did that for a number of years, and then thought it would be good to learn how big companies worked. And so went to McKinsey thinking I'd just be there for a couple years and then go back into the tech VC world, but ended up staying for 18 years. And I was involved in something called the Global Institute, which is kind of their macro economic think tank.
And my work there helped me realize that actually I had a real passion for these big picture economic issues. And so after a long career there, made the decision to go back into academia and started up the Institute for New Economic Thinking at Oxford, which is where I am now and also a professor at the School of Government there.

**Bilal Hafeez** (2:40)
Well, that's quite a varied career. And I can see why someone with your experience and skillset could set up the Institute at Oxford as well.

**Eric Beinhocker** (2:48)
Well, I think it helped give me a different perspective on the economy, because I'd like to say I was a practicing capitalist before I then had to study it. And so hopefully that helped bring a bit more of a real world perspective into my academic work.

**Bilal Hafeez** (3:01)
Great. That all makes sense. And the work that you've been looking at, it really goes to the heart of all the big topics of the day. You know, the context of this, I guess, is that we've had this environment or regime, you could say, of neo-liberalism that really emerged after the breakdown of Bretton Woods in the 70s. And then really has been a dominant regime for a long time, up until maybe the global financial crisis. Then it started to crack. And now we're in this environment of populism and question marks around inequality and so on. Many people attribute this break in the system and the rise of populism towards political factors or social factors, whether it's social media, tech companies, charismatic individuals and so on. But you have a different view. So perhaps we can use that as a springboard for a larger conversation.

**Eric Beinhocker** (3:47)
Yes. And if we step back a little bit, one of the points my co-author, Nick Hanna and I make is that economies aren't like physical systems. They're not governed by the laws of physics. They're human creations. And so they're governed by our ideas and theories and institutions about how the economy works. And so if you believe the ideas of, say, Adam Smith, the economy will work one way. If you believe the ideas of Karl Marx, they'll work another way. And so this set of ideas that provides a kind of governing infrastructure, or you can think of it as the operating system for the economies, we call that the economic paradigm.